The Click-Wrap Conundrum And WhatsApp's New Policy

Why don't we just click 'I agree' on WhatsApp and move on? It's not like we have a choice.

WhatsApp has yet again postponed its privacy update giving the users more time to acclimatise to the new privacy policy update. This article, however, is not about data privacy laws or monetisation of data.The fundamental question goes back to the basics of acceptance of contracts and parties' consent. Do user have a choice to keep their data private.

Under S. 10 of the Indian Contract Act, 1872, a contract has 4 major elements.Free consent of parties, competence of partiesy to enter into a contract, lawful object, and lawful consideration. Free consent means that the parties have the knowledge of the terms and they have without any fraud or misrepresentation offered or accepted to enter into the contract.The issue is that clickwrap contracts/ adhesion contracts, which almost all online service providers ask consumers to agree to, do not leave scope for negotiation.It is essentially a take-it-or-leave-it offeroffer where users can not enjoy the service if they do not agree to the non-negotiable terms set by them. Essentially there is no bargain. This doesn't sound very consensual, does it?

The question of adhesion contracts is not new and had been discussed by Lord Denning in Thornton V Shoe Lane Parking ltd[i] where he famously observed that if a customer had stopped to read the terms and conditions printed on the back of a ticket of a steamer, they would miss the steamer. WhatsApp is the steamer. And if you do not agree to their terms, which might be as vague as informing the partner brands that you recently bought a bicycle so that they can advertise their baskets. you cannot be on WhatsApp. Cycle your way out to a 'signal' maybe.

Judicial interpretation

In L'Estrange v F Graucob Ltd[ii] it was held that even if the acceptor had not acquainted themselves with the terms of the contract, they would be bound in the contract due to the signature of the acceptor.US Courts also upheld the claim of Google for a jurisdictional issue in Feldman v. Google[iii] where Mr. Feldman had claimed that no one in his firm had read the terms regarding dispute resolution.

Various protective devices have been laid down from time to time by common law courts which include giving reasonable and timely notice of the terms of the contract, sStrict construction against the drafter in case of ambiguity, and following the theory of fundamental breach where unreasonable consequences cannot be instituted owing to wide and sweeping exemptions.

Position in India

The courts in India may use S.16(3) of the Contract Act to reduce the possibility of unconscionable bargains, but this is generally applied in monetary matters.S. 23 does prohibit contracts that are against public policy, but with wide scope, comes narrow judicial intent to apply the same. S. 28 prohibits clauses in contracts that restrict contractual rights and legal recourse but has a limited application and contains exceptions as to the use of arbitration which is accepted by both parties.

The Hon'ble Supreme Court in Lilly White vs R. Munuswami[iv]heold that putting a limit on the damages due to the negligence of the dry cleaner would be opposed to public policy and fundamental principles of the law of contract, while in Indian Airlines Corporation vs Sm. Madhuri Chowdhuri And Ors.[v] the court held that the liability of the career will be limited to the exemption clause and not beyond that. These cases paint a grim picture of the validity exemption clauses.

In Maddala Thathiah's[vi] case, the clause giving unilateral power to terminate the contract was held to be void, being repugnant to the contract, while in Central Bank of India v. Hartford Fire Insurance Co.[vii] a similar case where the clause was held valid because it was a contractual term.

What's the alternative?

U.K.'s Unfair Contract Terms Act 1977 is a sweeping statute prohibiting exemption clauses like blanket immunity from damages for death caused due to negligence, not allowing the drafter to use the standard contract terms for his/her breach, and not allowing him/her to claim substantially different performance equivalent to performance. Section 2-302 of the Uniform Commercial Code in the United States also gives similar tenets for the governance of unfair terms.

A new statute on similar lines is imperativein India.

It is important to note that the question should be not about the consumer having a choice to shift to another provider, it is about having fair terms with all the providers and letting the consumer decide.If it is unconstitutional for the state to form policies infringing upon fundamental rights, such as right to privacy, the same is true forshould the individuals and corporations.

Views are Personal

[i] Thornton v Shoe Lane Parking Ltd [1970] EWCA Civ 2

[ii] L'Estrange v F Graucob Ltd [1934] 2 KB 394

[iii] Feldman v. Google, Inc., 513 F.Supp.2d 229 (E.D.Pa. 2007).

[iv] Lilly White vs R. Munuswami AIR 1966 Mad 13

[v] Indian Airlines Corporation vs Sm. Madhuri Chowdhuri And Ors. AIR 1965 Cal 252

[vi] Union Of India vs Maddala Thathiah 1966 AIR 1724

[vii] Central Bank Of India Ltd. vs Hartford Fire Insurance Co. Ltd. AIR 1965 SC 1288